Marginal field development in the prolific Niger Delta environment is of strategic importance to the Federal Government of Nigeria’s drive towards aggressive reserve and production capacity enhancement. For successful development of a marginal field, it is imperative to understand the various risks and uncertainties that are inherent in developing the field as the oil industry is exposed to a lot of risk more than most manufacturing industries in the world. This study offers clarification and deep intuition about the insidiousness of these risk factors, discusses their wider implications and gives justification for their economic significance. This study investigates a total of thirty-four (34) risk variables influencing marginal oil field development by using a survey approach involving the use of Kendall’s Coefficient of Concordance (KCC) and Principal Component Analysis (PCA). The Kendall’s Coefficient of Concordance (KCC) analyzed the level of agreement among the 13 Judges who ranked the variables in descending order of importance. The result showed an index of agreement in ranking among the judges as W=0.60. This indicates 60% agreement among the Judges. The Principal Component Analysis (PCA) facilitated by StatistiXL software package was efficient in achieving parsimony in factor reduction from thirty-four variables to mere six factors. The result shows that six principal factors, creatively labelled: Geo-technical Economism, Operational and Economic Leaven, Fiscal Ripple, Bottom Line, Logistics and Oil quality represent the principal risk factors that influence marginal oil field development in Nigeria. This study brings to bear the militating factors that affect operations and profitability of marginal oilfields development in Nigeria.
Factor Reduction, Marginal Field, Oil Production, Parsimony, Risk